Senseo Report

By

Naje Alsulami

(M00379584)

Submitted to

Dr.Michael

For

International & Cross-Cultural Marketing (MKT 4023)

Submission date: 14/12/2011

Middlesex University Business School

Senseo Report

Introduction

Culture has a significant impact on global and international marketing. With companies going global, marketing will have to take help from synergizing the efforts through strategic partnerships and alliances. In co-marketing, the brand manufacturer would be better off not to form (or sustain) the alliance unless the market is expected to expand. From the alliance coordinator's standpoint, for a given overall strength, the alliance is most attractive if the strengths of the partnering brands are comparable. This paper assesses the efficacies of strategic alliance between Philips, a renowned name in electronic appliances, (and later coffee pod system co-manufacturer), and Douwe Egberts, a coffee, tea and household products manufacturer. The paper explores the history of this strategic partnership and gauges its implications, costs, and benefits for each partner using the Upsala model.

1. What are the key success factors in this industry?

Senseo is a result of partnership between Philips and Sarah Lee/ Douwe Egberts and this successful partnership resulted in providing better market opportunities. Similarly, it also helped to face the market competition. The success of a partnership depends heavily on the quality of effective and honest coordination among the project partners. The commitment of implementing project tasks, in turn, will depnd on the mutual agreement of the partners. In strategic alliance for Senseo coffee systems, for example, the partners mutually helped each other before customers and profits started pouring in.

Successful partnership enhances cooperation between project stakeholders, increases their dedication towards achieving project objectives, creates collaborative and harmonious environment that escalates productivity and stimulates the generation of creative and innovative ideas. In addition, working as partners towards solving arising problems during the course of works generates positive feedback and mutual respect (Gibbon, 2008, pp. 315). This leads to replace confrontation with cooperation and reduce claims as well as disputes. Furthermore, initiating partnership at the early stages of the project life cycle facilitates project stakeholders' mutual understanding and appreciation of one another's views and establishes lines of effective communication and efficient planning.

Strategic dominion is in the hands of leading enterprises (primarily Philips and Sarah Lee/ Douwe Egberts ), which are drivers of the formation and evolution of global value chain and possess the strength of their coordination and management. Suppliers, on the other hand, are in the position of subordination. The value chain as a whole displays a pyramid-shaped power and governance structure. Asymmetry in global value chain leadership actually reflects the asymmetry between both sides of transaction in the distribution of relational rents. The greater leadership strength of Senseo is, the higher share of relational rents will be obtained. However, in global value chains, the asymmetrical distribution of such leadership power also follows a pattern of dynamic change.

Decision by coordination and organizational execution functions are core systems, while policy command, consulting service and credit service are secondary systems. Philps and Sarah Lee/ Douwe Egberts are members of both decision ...